Riggs 2.0

One Simple Question

You know what’s hilarious about the world we live in?

(No, it’s not this guy, although he gets me every time.)

What’s funny to me is how often we as a society can find ways to overcomplicate things.

Think about that for a second....how often do we say, do, or think too much about something (or someone for that matter), and how often does the information we try and process affect our decision making?  I think they call this "paralysis by analysis" - where we take in so many inputs that our thoughts, communication, and how we choose to allocate our time, money and attention all get thrown out of whack.  What's worse, often times we do nothing and repeat the same patterns because there is so much information we can learn about ourselves, we don't know where to start to act on it.

While your heads are probably filling up with hundreds of examples from the world of politics, academia, past relationships, or the mission statements of most Fortune 500 companies – I was really interested to hear about a really simple concept that cuts through all of that.

It’s called The Net Promoter Score. 

From their website:

There is one question that provides the best predictor of customer loyalty and for the vast majority of business:

"How likely is it that you would recommend (Company X) to a friend or colleague?"

The "Net Promoter Score" or NPS, is simply the percentage of customers whose answers identify them as promoters minus the percentage whose response indicates they are detractors. Comparable to a financial net worth that takes the assets minus the liabilities, NPS provides a customer net worth by subtracting the liabilities (detractors) from the assets (promoters).

NPS provides the single most reliable indicator of a company's ability to grow. Companies that have pioneered the use of this metric are way out ahead of their competitors. In most industries, the Net Promoter leader has superior growth - averaging more than twice the rate of their competition.

Three Categories of Customers

NPS is based on the fundamental perspective that every company's customers can be divided into three categories. Customers can be categorized according to their answer to the Ultimate Question based on a 0-to-10 point rating scale with "0" representing the extreme negative and "10" representing the extreme positive end.

• Promoters (those who answer 9 or 10) are loyal enthusiasts who keep buying from a company and urge their friends to do the same.
• Passives (those who answer 7 or 8) are satisfied but unenthusiastic customers who can be easily wooed by the competition.
• Detractors (those who answer 0 through 6) are unhappy customers trapped in a bad relationship.

......

“Would you recommend us to a friend or colleague?”

Now if a picture is worth a thousand words, then is the answer to that question worth millions?  Doesn't that tell you everything you need to know about your product, service, or support, and don't you think that where you spend your time, money, and attention would be affected by what you find out from engaging in this exercise?  This to me is one of those ideas that just seems so crazy and simple, that it just might work.  But there is a ton of research on it, as well:

The Net Promoter Score’s wikipedia entry is here, so read all about it.
The Net Promoter Score’s website is here, along with links to a book and the methodology behind it.

I’m so fascinated by this concept that I’m wondering how it can be applied to other areas of the world besides companies that have clients to ask this question of.  For example:

1)  A job hunter asking all his former employers: “Would you recommend me to a friend or colleague?”
2)  A politician seeking reelection: “Would you recommend voting for me to a friend or colleague?”
3)  Even an ex girlfriend:  "Would you recommend dating me to a friend or colleague?”

(I think you get the point)

Anyway, take a look at the literature on this, and if you are in any position to bring this into your company, give it a shot. I’m going to be advocating that our execs take a look, and will be very interested to see the results. 

How else do you think this one simple question can apply in your business or your lives?

What are YOU so optimistic about?

Interesting title for a blog post, isn’t it?  What’s even more interesting is that this simple, one line inquiry is 2007’s question of the year.

Since 1997, the World Question Center - an online “salon” where some of the top minds from science, the arts, humanities, and popular culture gather together - has been posing a new question at midnight EST on December 31^st. These top thinkers all begin answering the question in essay format, providing thoughtful, and often contrarian insights into the world around us on such questions as “what’s your dangerous idea”, “what do you believe to be true but cannot prove”, and “what questions have disappeared”.

Needless to say, the results are stunning. This year’s question comes at an interesting time (which I’m sure is the point). Climate change, global conflict, religious intolerance, the war on terror, economic inequalities, and rampant consumerism all provide a pretty heavy backdrop in our lives, making it seemingly counterintuitive to think of a question like this one.  But according to some of the top minds in the world, we have every reason to be optimistic about the very issues we plague ourselves with day in and day out.

Here are some examples:

Worried that religious extremism is engulfing the world?  Check out why Daniel C. Dennett thinks that cell phones may have a role to play.

Concerned that the world’s population is spinning out of control?  Ask Geoffrey Carr why he thinks that’s a fool’s bet. 

Think the world is about as violent as it can be right now?  Chris Anderson shows us that the number of armed conflicts in the world has fallen by 40% in the past decade, and that there are grounds for more optimism here than ever. 

Steven Pinker agrees, and takes us one step further.

What about global warming and the impending climate crisis?  Alun Anderson seems to be pretty optimistic about a couple of big numbers.

If you plan on clicking any of the links above, please do so at your own risk.  This site is like crack cocaine for the mind, and with over 160 contributors so far, there is something in it for everyone.So what are YOU so optimistic about?

Man, I am SUCH a loaner....

From Wikipedia:

"Microcredit is the extension of very small loans (to the unemployed, to poor entrepreneurs and to others living in poverty who are not bankable). These individuals lack collateral, steady employment and a verifiable credit history and therefore cannot meet even the most minimum qualifications to gain access to traditional credit. Microcredit is a part of microfinance, which is the provision of financial services to the very poor; apart from loans, it includes savings, microinsurance and other financial innovations."

Well, once again I'm late to the party, but somehow managed to make it in before last call.  (Turns out 2005 was actually the Year of Microcredit, according to the UN).  I first learned about microfinance and the microcredit movement about 6 months ago, when I was doing some reading on the man who would eventually become this year's Nobel Peace Prize Winner: Dr. Muhammad Yunus.  If you haven't read his story, it's pretty inspirational - but not nearly as inspirational as the thousands of people that have been lifted out of poverty and empowered through microfinance.

What's the point, Riggs?  Well, like a lot of revolutionary social movements, sometimes it can be difficult for the everyday person to find a meaningful way to participate.  But, leave it to the Internet to change all that.  I recently found a terrific organization that allows you, me, and anybody with access to the Internet to participate in a microcredit loan to entrepeners half a world away. 

The organization is called Kiva.org, and here's how it works:

I just logged in and loaned money to 7 different entrepreneurs in 6 different countries (and had to stop myself from lending to more).  I figured this is a great way to not only put my money where my mouth is, but also to be a little selfish in my daily search for inspiration.  What these people, and the organizations who serve them are doing is truly remarkable.

To find out more about Kiva, and how you can get involved, check out www.kiva.org.

(And, if you want to keep an eye on how the entrepreneurs in MY Kiva portfolio are doing, check out my lender page.)

Allow myself to introduce....myself....

Ok, long time reader, first time writer. Just wanted to see what the fuss was all about, so I thought I’d join the great “conversation” that is the blogosphere.

About me: Born in Calgary, lived in Fredericton, now live in Toronto. Majored in Economics, minored in basketball at the University  of Waterloo. Co-founded a startup in the first bubble, and have been a media and culture junkie ever since. Been lost in over 20 countries and 80 cities (on purpose) and am a fanatic for anything that makes people think, connect, and communicate more effectively.

I have no idea what to expect from this online adventure, but I know I’m looking forward to it.  Thanks for stopping by.